8 Best Vanguard Funds to Invest In for Retirees

1. Vanguard Mega Cap Growth Index Fund (NYSE:MGK)

5-Year Share Price Performance as of February 18: 126.06%

For investors with some time till retirement, striving for growth is a great goal, and in that regard, few funds have performed better than the Vanguard Mega Cap Growth ETF (NYSE:MGK). MGK is an exchange-traded fund that tracks the CRSP US Mega Cap Index, which includes about 70% of the biggest publicly listed firms in the United States. These giant corporations have a median market capitalization of more than $2 trillion. The ETF is momentum-based by definition, since outperforming stocks grow to account for a higher portion of MGK’s portfolio.

Tech giant Microsoft Corporation (NASDAQ:MSFT) is one of the biggest names in MGK’s portfolio. The company offers a wide range of software, services, and devices that increase productivity and computing proficiency. Microsoft’s cloud computing platform, Azure, is also a key participant in the cloud services industry.

On January 30, RBC Capital Markets reaffirmed its Outperform rating for the MSFT stock, with a $500 price target. The firm recently announced its software industry forecast 2025, where it preferred Microsoft Corporation (NASDAQ:MSFT) for its varied market exposure and position to gain on generative AI.

Bretton Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 2024 investor letter:

“Microsoft Corporation (NASDAQ:MSFT) has become the go-to provider of computing services for many emerging AI companies, and its franchise is much more diversified than Alphabet’s, making it a net beneficiary of the AI arms race. Demand for its cloud computing services continued to grow, and the rest of its business (Orce, Windows, Xbox, GitHub, LinkedIn) are also thriving, sending earnings per share up 22% while the stock returned 13%.”

While we acknowledge the potential of MSFT, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

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